$100B Softbank Technology Fund Vexing VCs

Softbank

Money the key to happiness? Well yeah, EXCEPT if you are looking for new investments. We all know (or should know) that Japanese robotics firm SoftBank recently unveiled a $100 billion technology fund (and promised $50B to President Trump to create 50,000 new American jobs), and is actively making investments much to the “crankiness” of venture firms worldwide. WHY? Well its driving up valuations and nabbing the best deals because it can pay more. Wow. just think, VC firms having to pay “retail”. Damn that big money.
(Bill Taylor/CEO)

“New York/San Francisco: Earlier this month SoftBank led a $502 million investment in a London-based virtual reality start-up called Improbable Worlds. Less than two years ago, the start-up was worth about $100 million. Then SoftBank came along, and suddenly it was worth 10 times that. Overnight, Improbable Worlds had become a unicorn.

In the months since Softbank Group Corp. unveiled plans for a $100 billion technology fund, the Japanese company has been making its presence deeply felt across the industry. The Vision Fund closed a few days ago with $93 billion in initial commitments, and already venture firms from London to Silicon Valley are fretting about a behemoth with the resources, clout and name recognition to snatch away the most promising deals.

Just last week, SoftBank swooped in and pumped $1.4 billion into Paytm, India’s largest digital-payments start-up. The deal boosted Paytm’s valuation by about 40% to $7 billion. That’s not outlandish given Paytm’s dominant market position, but the valuations of other SoftBank deals have prompted head-scratching and ignited alarm that a funding atmosphere that only recently cooled off will heat up again.

To put the size of the fund in perspective, there were more than $100 billion worth of global VC deals done in 2016, according to research firm Preqin. Moreover, because Masayoshi Son’s company typically makes investments of at least $250 million—big by venture standards—some VCs say the influx of money will give fledgling companies more room to run, whether they deserve it or not…”

Source: Livemint